CITATION: Rampersad v. IPC Investment, 2015 ONCS 4521

COURT FILE NO.: CV-12-469054

MOTION HEARD: May 21, 2015

SUPERIOR COURT OF JUSTICE – ONTARIO

Re: KEVIN RAMPERSAD

Plaintiff

v.

IPC INVESTMENT CORPORATION and

INVESTMENT PLANNING COUNSEL INC.

Defendants

BEFORE: Master Lou Ann M. Pope

APPEARANCES:

Ian MacLeod, Lenczner Slaght Royce Smith Griffin LLP, for plaintiffs

Fax: 416-865-3701

Christopher J. Somerville, Affleck Greene McMurtry LLP, for moving defendants

Fax: 416-360-5960

REASONS FOR ENDORSEMENT

[1] This is the defendants’ motion for an order to compel the plaintiff to answer certain undertakings given and questions refused at his examination for discovery held on July 9, 2014.

Undertakings 2, 3 and 4

[2] For oral reasons given at the hearing, my rulings were as follows:

Undertaking 2: satisfied May 21, 2015.

Undertakings 3 and 4: not satisfied

Refusals

[3] The questions that the plaintiff refused to answer relate to two issues; namely, the GLGI tax shelter and the plaintiff’s damages.

Group A – GLGI tax shelter

[4] Refusals A1 and A2: These questions are not relevant to any matter in issue in this action. The plaintiff’s personal finances relative to the GLGI tax shelter are not in issue, including any letter or reassessment he may have received from CRA. Further, it was not pled by any party that the defendants had a regulatory obligation to supervise or review the plaintiff’s personal investments. Similarly, the fact that the plaintiff may have invested in the GLGI tax shelter and subsequently had dealings with CRA is not related to any of the plaintiff’s allegations against the defendants. Therefore, these questions were proper refusals and need not be answered.

[5] Refusals A3 to A8: These questions are not relevant to any matter in issue in this action. The issues in this action are not related to any investigation the defendants may have conducted as a result of a complaint by one of the plaintiff’s clients. The plaintiff alleged breach of contract and defamation as a result of particular contents of IPCIC’s letter dated April 4, 2011 that related to the GLGI tax shelter. In response, the defendants alleged that in contacting “other clients served by the plaintiff”, they were merely fulfilling their regulatory obligations to review the complaint, to provide a substantive response and to contact other clients served by the plaintiff to determine whether any other clients had contributed to the GLGI or had been solicited by the plaintiff to do so. (Statement of Defence, para. 35) Therefore, the only allegations that need to be proven at trial by the defendants in this respect are that the defendants in fact had such regulatory obligations and that the steps they took, including the April 4, 2011 letter, were proper or appropriate. It is not in issue whether the GLGI tax shelter was approved by CRA. Thus, any compensation the plaintiff may have received, the years he may have received compensation, etc. are not relevant to any matter in issue and will not, in my view, assist the trial judge in any way. It appears that the defendants were attempting to turn the examination for discovery into an investigation of the plaintiff’s former client’s complaint regarding the GLGI tax shelter, which, in my view, is a fishing expedition for no valid reason.

[6] For the above reasons, the refusals were proper and need not be answered.

Group B – Plaintiff’s Damages

[7] Refusal B2: This refusal is similar to Question 641 that resulted in Undertaking 1; however, this question, being Question 683, is more specific in that the defendants asked for the names of every client of the plaintiff who “told him that they hadn’t come over to his new dealer because of what was said in the Mary Kraljevic letter”. (emphasis) Question 641 asked for a list of all the clients that the “Plaintiff says did not follow him . . . .” (emphasis)

[8] There is a difference between these two questions. This question, in my view, goes to the heart of the damages issue. The plaintiff answered, and has a continuing obligation to answer, Question 641 by producing a long list of the clients that he says did not go with him to his new dealer. However, that is not the end of the enquiry regarding the plaintiff’s allegations that certain of the defendants’ actions resulted in many of his clients not going with him to his new dealer. The plaintiff will be required at trial to prove which clients that he listed in answer to Question 641 did not go with him to his new dealer because of the defendants’ actions. (see allegations in Statement of Claim, paras. 24, 29, 30) There are two aspects to the allegation: what clients did not go with the plaintiff to his new dealer and which ones did not go due to the defendants’ actions. It is not a proper assumption that, for example, because 40 clients did not go with the plaintiff to his new dealer that they did not go because of the defendants’ actions.

[9] This question, in my view, is relevant to the specific allegations made in the statement of claim, in addition to the issue of damages. The plaintiff will not be able to quantify his damages unless he identifies the names of every former client who, in his view, did not go with him to his new dealer as a result of the defendants’ actions.

[10] For the above reasons, this refusal was improper and the question must be answered.

[11] Refusal B3: The defendants want to know what clients, according to the plaintiff, did not go with him to his new dealer “because of the defendants’ conduct”. This question is not the same question as any previous question. It is different from Refusal B2 which asked for the names of clients who told the plaintiff they did not go with him because of the defendants’ action. In my view, this question is relevant to the plaintiff’s allegations. Therefore, the refusal was improper and the question must be answered.

[12] Refusal B4: For clarity, the question that was refused was Question 683, at page 179, line 22 to page 180, line 8.

[13] In my view, the defendants want to know if any of the plaintiff’s clients told him specifically why they did not go with him to his new dealer. This question would essentially be an add-on to Refusal B2 (those clients who “told” the plaintiff ….). Therefore, not only do the defendants want to know what clients told the plaintiff that they did not go with him because of the defendants’ conduct, but also if they told the plaintiff the reasons why they did not go with him.

[14] It is my view that this question is also directly relevant to the plaintiff’s allegations that some clients did not go with him to his new dealer as a result of what was said in Mary Kraljevic’s letter. Further, the defendants are entitled to know at this discovery stage what the evidence will be at trial in order for them to assess the strength of their defence and to better prepare for trial.

[15] For the above reasons, this refusal was improper and the question must be answered.

[16] In conclusion regarding Refusals B2, B3 and B4, it is my view that there were essentially three distinct, although related, questions asked by the defendants, as follows:

According to the plaintiff,

a) What clients did not follow him to his new dealer to the end of 2011 (Undertaking 1);

b) What clients did not go with him because of the defendants’ conduct (Refusal B3); and

c) What clients told the plaintiff they did not go with him because of the defendants’ actions (B2).

[17] For example, the plaintiff could prepare a chart with three columns in which a) was the longest list of all clients who did not go with him to his new dealer. (It appears from the evidence that the plaintiff has produced a list of some 50 clients who did not follow him.) The second column would likely be a shorter list of clients who, in the plaintiff’s view, did not go with him because of the defendants’ conduct. The third column would, presumably, be the shortest list of clients who told the plaintiff they did not go with him because of the defendants’ actions.

[18] Refusal 5: This question appears to be the same as Undertaking 4 which was to produce all commission statements from the plaintiff’s dealer; however, this refusal at Question 687 was that the plaintiff undertook to produce the commission statements of the plaintiff’s “insurance business placed through the MGA . . . to the extent that it is relevant.” (emphasis) Therefore, the basis of the plaintiff’s refusal is lack of relevancy.

[19] In my view, as with Undertaking 4, the fees and revenues the plaintiff earned since leaving the defendants are relevant to the issue of the plaintiff’s alleged damages in order for the defendants to understand the actual fees and revenues the plaintiff earned on the clients who did follow him since he left the defendants. Further, it is illogical, in my view, for the plaintiff to undertake to produce the commission statements for his dealer accounts and not his MGA accounts.

[20] For the above reasons, the refusal was improper and the question must be answered.

[21] Refusals B6 and B7: In my view, the relevant comparison with respect to the plaintiff’s income is between his income before he left the defendants compared to after he left the defendants when he was with the new dealer relating only to revenue he received from business from the clients who followed him to his new dealer. The comparison is not of his income before he left the defendant versus after he left the defendant. (see allegation in para. 43 of statement of defence) Thus, production of the plaintiff’s current clients and particulars of their assets under management are not relevant to any matter in issue. Further, in my view, the allegation made in paragraph 5 of the statement of defence is not relevant to any matter put in issue by the plaintiff. The mere fact that a defendant makes an allegation in a statement of defence does not automatically make the allegation relevant to a matter in issue in the action. Pleadings may and often do contain irrelevant statements and allegations.

[22] For the above reasons, these refusals were proper and the question need not be answered.

Costs

[23] Given the divided result, there shall be no order as to costs.

[24] The completed Revised Refusals and Undertakings Chart is attached hereto.

(original signed)_

Lou Ann M. Pope

Released: July 13, 2015